The True Cost of Buying Property in Mallorca: Complete Breakdown 2026

One of the most common surprises for foreign buyers in Mallorca is that the purchase price is only part of what you will pay. Between taxes, notary fees, legal costs, and bank charges, you should budget an additional 10–15% on top of the property price. This guide breaks down every cost so there are no nasty surprises at the notary’s desk.

The Big One: Transfer Tax (ITP)

When you buy a resale property in the Balearic Islands, you pay Impuesto de Transmisiones Patrimoniales (ITP) — a transfer tax that is by far the largest additional cost. Since 2023, the Balearic Government has applied a progressive sliding scale based on the purchase price:

Property Price Bracket	ITP Rate
Up to €400,000	8%
€400,001 – €600,000	9%
€600,001 – €1,000,000	10%
€1,000,001 – €2,000,000	12%
Over €2,000,000	13%

Important: This is a marginal scale, similar to income tax bands. You do not pay 9% on the entire price just because the property costs €450,000. You pay 8% on the first €400,000 and 9% on the remaining €50,000.

New-build properties are different: instead of ITP, you pay IVA (VAT) at 10% plus AJD (stamp duty) at 1.5%. This totals 11.5%, making new builds slightly more expensive in terms of transaction taxes in most price brackets.

Reduced rates: Young buyers (under 30, or under 36 in some cases), buyers of officially protected housing (VPO), and large families may qualify for a reduced ITP rate of 4%. However, these reductions are primarily aimed at resident buyers purchasing their main home.

Notary Fees (Aranceles Notariales)

In Spain, the purchase deed (escritura de compraventa) must be signed before a notary. Notary fees are regulated by the Spanish government, so they are the same regardless of which notary you choose. They are calculated on a sliding scale based on the property value:

• Typical range: €600 – €1,200 for most Mallorca purchases
• As a percentage: Roughly 0.3% – 0.8% of the purchase price
• Additional copies: You will pay extra for additional authorised copies of the deed, typically €50–€150 each

If you are also signing a mortgage deed, the notary fees for that are paid by the bank (since the 2019 mortgage law reform), not by you.

Land Registry Fees (Registro de la Propiedad)

After completion, the new deed must be registered at the Land Registry to officially transfer ownership. Like notary fees, these are regulated and based on the property value:

• Typical range: €300 – €700
• As a percentage: Roughly 0.2% – 0.5% of the purchase price

Registration is handled by your lawyer or gestoría and usually takes 2–4 weeks after the signing.

Lawyer Fees (Abogado)

Hiring an independent property lawyer is not legally required in Spain, but it is strongly recommended — and for foreign buyers unfamiliar with the Spanish system, it is effectively essential. A good property lawyer will:

• Check the nota simple (land registry extract) for outstanding debts, charges, or legal issues
• Verify that the property has the correct planning permissions and licences
• Confirm that the seller is the legal owner and has the right to sell
• Review all contracts before you sign
• Ensure community of owners (comunidad de propietarios) fees are up to date
• Coordinate with the notary and handle post-completion paperwork
• Arrange direct debits for ongoing taxes and utility bills

Typical cost: 1% of the purchase price, with a minimum of around €1,500–€2,000. Some lawyers charge a flat fee regardless of the property value. Always agree the fee structure in writing before instructing them.

Tip: Choose a lawyer who is independent of the estate agent and the seller. Your lawyer works for you alone. Never use the seller’s lawyer or a lawyer recommended by the agent without satisfying yourself of their independence.

Gestoría Fees

A gestoría (administrative agency) handles the bureaucratic side of the transaction: filing tax forms, registering the deed, setting up direct debits for utilities and local taxes, and processing your NIE application. Some lawyers include these services; others outsource them to a gestoría.

• Typical cost: €300 – €600
• NIE application (if handled separately): €100 – €200

Bank Charges (If You Have a Mortgage)

Thanks to Spain’s 2019 mortgage law (Ley Reguladora de los Contratos de Crédito Inmobiliario), many costs that were previously borne by the buyer are now paid by the bank. However, you will still pay:

• Property valuation (tasación): €300 – €600. The bank requires an independent valuation by a certified surveyor, and this cost falls on you.
• Arrangement fee (comisión de apertura): Some banks still charge this, typically 0.5% – 1% of the loan amount. Many banks have dropped this fee under competitive pressure, so negotiate or choose a bank that does not charge it.
• Home insurance (seguro de hogar): Compulsory when you have a mortgage. Expect €200–€500 per year depending on the property. The bank will offer their own product, but you are legally entitled to choose any insurer.

Costs now paid by the bank (not you):

• Notary fees for the mortgage deed
• Land registry fees for the mortgage
• AJD (stamp duty) on the mortgage
• Their own legal costs

Worked Examples: What You Will Actually Pay

Example 1: Resale Apartment for €300,000 (No Mortgage)

Cost	Amount
Purchase price	€300,000
ITP (8% on €300,000)	€24,000
Notary fees	€750
Land registry	€400
Lawyer (1%)	€3,000
Gestoría	€400
Total additional costs	€28,550 (9.5%)
Grand total	€328,550

Example 2: Resale Villa for €500,000 (With 60% Mortgage)

Cost	Amount
Purchase price	€500,000
ITP (8% on first €400k + 9% on remaining €100k)	€41,000
Notary fees	€900
Land registry	€500
Lawyer (1%)	€5,000
Gestoría	€450
Bank valuation	€500
Mortgage arrangement fee (0.5% of €300k loan)	€1,500
Total additional costs	€49,850 (10.0%)
Grand total (price + costs)	€549,850
Cash needed (40% deposit + costs)	€249,850

As you can see, the cash you need to bring to the table is the deposit (30–40% of the purchase price) plus all the additional costs. For a €500,000 property with a 60% mortgage, you need approximately €250,000 in cash.

Ongoing Costs of Property Ownership in Mallorca

Once you own your property, there are several recurring costs to budget for:

IBI (Impuesto sobre Bienes Inmuebles)

This is the annual council tax equivalent, based on the valor catastral (cadastral value) of the property — which is typically much lower than the market value. Rates vary by municipality but typically range from €400 to €2,000 per year for a standard apartment or villa. Palma and Calvià tend to have higher IBI bills due to their higher cadastral values.

Community Fees (Cuotas de Comunidad)

If your property is in a building or urbanisation with shared areas (pool, gardens, lifts, communal areas), you will pay monthly or quarterly community fees. These can range from €50 to €500+ per month depending on the facilities. A basic apartment block might charge €60–€100/month, while a luxury development with pools, tennis courts, and 24-hour security could charge €300–€500/month. Check the community accounts before buying — large upcoming maintenance levies (known as derramas) can be costly.

Non-Resident Income Tax (IRNR)

Even if you do not rent out your property, as a non-resident owner you must pay an annual imputed income tax. This is calculated as:

• 1.1% of the cadastral value × 24% tax rate (for non-EU residents, including UK post-Brexit)
• 1.1% of the cadastral value × 19% tax rate (for EU/EEA residents)

For a property with a cadastral value of €150,000, a UK non-resident would pay approximately €396 per year. If you do rent the property out, you pay 24% on the gross rental income (no deductions for expenses — unlike the 19% rate for EU residents, who can deduct expenses).

Wealth Tax (Impuesto sobre el Patrimonio)

The Balearic Islands apply a wealth tax on net assets. For non-residents, only Spanish assets count. There is a general allowance of €700,000, so this only applies if your Spanish property (and any other Spanish assets) exceeds this threshold. Rates range from 0.28% to 3.45% on a progressive scale. As of 2026, the Balearic Government has maintained this tax despite some regions abolishing it.

Home Insurance

€200 – €800 per year depending on the property size, value, and level of cover. Compulsory if you have a mortgage; highly recommended even if you do not.

Utilities and Maintenance

Budget for electricity, water, internet, and general maintenance. A typical 2-bedroom apartment costs €150–€250/month in running costs; a villa with a pool can easily reach €300–€500/month, more in summer with air conditioning and pool maintenance.

Currency Exchange Considerations for GBP Buyers

If you are buying from the UK, converting a large sum from pounds sterling to euros is one of the most significant financial decisions in the process — and one of the most overlooked. Here is what you need to know:

Never Use Your High Street Bank

UK banks typically offer exchange rates 2–4% worse than the interbank rate. On a €300,000 transfer, that is £5,000–£10,000 lost to a poor exchange rate. Instead, use a specialist currency broker such as Currencies Direct, Smart Currency Exchange, or CurrencyFair. These firms operate on margins of 0.3–0.7%, saving you thousands.

Forward Contracts

A forward contract allows you to lock in today’s exchange rate for a future transfer (up to 2 years ahead). This is invaluable when you sign a deposit contract in euros but will not complete for another 2–3 months. Without a forward contract, a fall in the pound could increase your costs by thousands.

Rate Alerts and Limit Orders

Set up rate alerts with your currency broker to notify you when GBP/EUR hits a favourable level. You can also place a limit order that automatically executes the transfer when the rate reaches your target.

The Impact of Exchange Rates: A Real Example

Consider a €400,000 property. At GBP/EUR 1.18 (a strong pound), you need £338,983. At GBP/EUR 1.12 (a weaker pound), you need £357,143. That is a difference of £18,160 — more than the entire cost of transfer tax on many properties. Exchange rate management is not optional; it is essential.

Tax Planning: What Your Accountant Should Know

A few points to discuss with your UK and/or Spanish tax adviser:

• Double taxation treaty: The UK–Spain treaty prevents you being taxed twice on the same income, but you must actively claim relief.
• Capital gains tax: When you sell, Spain will withhold 3% of the sale price as an advance payment on CGT for non-residents. The actual CGT rate for non-residents is 19% on the gain. If the withholding exceeds the tax due, you can reclaim the difference.
• Inheritance tax: Spanish succession tax (Impuesto sobre Sucesiones) applies to Spanish assets regardless of your residence. Rates in the Balearics were significantly reduced from 2023, with allowances for close family members. Plan ahead — Spanish inheritance rules differ from English ones, and a Spanish will covering your Spanish assets is strongly recommended.
• Annual declarations: As a non-resident property owner, you must file an annual non-resident tax return (Model 210) in Spain, even if you owe very little tax.

Summary: Budget Checklist

Before you start your property search, make sure your budget covers:

• Deposit: 30–40% of purchase price (if mortgaging) or 100% (if cash)
• ITP: 8–13% (resale) or 11.5% IVA + AJD (new build)
• Notary: ~€600–€1,200
• Land registry: ~€300–€700
• Lawyer: ~1% (min €1,500–€2,000)
• Gestoría: ~€300–€600
• Bank valuation: ~€300–€600 (if mortgaged)
• Currency exchange buffer: 1–2% of the total
• Furniture, renovations, moving costs: as applicable

Rule of thumb: Budget 12–14% on top of the purchase price for all transaction costs, and you will have a comfortable margin.